Alvogen announced today that it has acquired Dream Pharma (“Dream”) in South Korea for US$ 187 million in cash. Dream will be acquired through Alvogen’s Asian subsidiaries and, on completion, will create one of the largest generic pharmaceutical companies in South Korea. The transaction represents a significant milestone in Alvogen’s stated ambition to become one of the top five regional players in the APAC market.
The acquisition of Dream will significantly strengthen Alvogen’s existing business in South Korea, adding a complementary portfolio of over 100 products. Dream currently has an impressive 35% market share in obesity products in Korea, with no overlap with Kunwha’s current portfolio in the market. The consolidated business creates a strong platform for exports and a basis upon which to introduce the Korean portfolio into other APAC markets.
Alvogen’s acquisition of Dream is the third significant acquisition that the Group has made in APAC since 2012. The transaction will create a strong platform from which Alvogen can drive revenue and profit growth across the region. APAC is one of the fastest-growing regions globally for generic pharmaceuticals. The market remains very fragmented, which provides an excellent opportunity for Alvogen to play a leading role in further industry consolidation, with a focus on building a selective, hiqh quality product portfolio in markets such as Korea, Taiwan, Thailand, China, Japan and Vietnam.
The transaction is subject to regulatory approval and closing is expected in the fourth quarter 2014.
Commenting on the acquisition, Robert Wessman, President and CEO of Alvogen, said:
“I am delighted to announce this transaction. Dream is an excellent business and we are looking forward to collaborating with their high-calibre team as we work to fuel regional growth and to gain scale in the Korean market and a broader product offering. Alvogen’s business continues to grow from strength to strength in APAC and our commitment to the region is yielding clear results. This transaction further underlines our ability to act as a powerful industry consolidator and demonstrates the momentum we are building towards becoming one of the top five players in the APAC market.”
Market backdrop The APAC regional pharmaceutical market is currently valued at around US$ 84 billion and is expected to grow by about 16% a year over the coming years. Regional markets are still very fragmented with very few regional or global players with a foothold. South Korea is a region with strong fundamentals, including rising domestic GDP, an ageing population and a growing export market. South Korea is one of the fastest growing developed markets for medicines in the world, delivering a growth of over 6% a year since 2010.
The consolidated business of Kunwha Pharmaceuticals and Dream Pharma creates one of the largest generic pharmaceutical businesses in Korea.